Re: Procedure as normal
Not all tech companies, and I would surmise probably not the majority either (although you are quite right in suspecting that waaaaaaaay too many have formed and folded on the back of vapourware of one form or another).
What I can say from personal experience and approach is that the angel and VC circuits are way tougher than they used to be. Dotcom handouts just don't happen much anymore. I/we have done things the longer, harder way (concept, invention, proof of concept, translation into commercially-viable MVP ... and THEN some networking and panhandling. Taken a while to get to this stage, but we now have investors hungry to get onboard BECAUSE we have someting tangible and provably what it says it is.
Of course VC is high risk ... if it wasn't, the more conservative institutions would be all over investing in or loaning money to startups.
And kids? Yeah ... there are PLENTY of them. But I grant them this - they're almost all bright little buggers. I am somewhat older than the median of the startup pack - hmm - maybe that has a little to do with my/our refusal to go panhandling with some vague tho sexy-sounding concept.
I think you'll find there is little stupid VC out there ... sure, there is some, but the majority has wised up considerably. At least it has in Canada (which is where my little thing has taken root). South of the border, it's a pretty serious game too. I cannot speak for the rest of the world - I've only had experience of London (the real one ... GMT etc etc), and the West Coast of Canada, and a little of the US scene.
Startup World is a seriously hard place to be ... well, certainly if you take the whole process seriously and are not trying to scam 7 or 8 figures to Get Rich-ish Quick.
Your closing sentence is pretty much what VCs do. It's betting. The clever ones bet more winners than losers. But even great tech sometimes just ... doesn't make it.
I am of course hoping like hell that mine does!